Chapter 17Capital and Labor In The Age of Enterprise (1877-

1900)

Although the economic growth of the United States between 1860 and 1900 has been attributed to a governmental policy of laissez-faire, it was in fact encouraged and sustained by direct governmental intervention. Assess the validity of this statement.

How and why did transportation developments spark economic growth during the period from 1860 to 1900 in the United States?

What factors led to the economic success of

industrial capitalism after 1877?

Chapter 18 Due Monday Night Short quiz Tuesday day in class! You’re Welcome ;-)

Industrial Capitalism Triumphant

The Great Deflation – Late 19th century (1800’s) as a result of increasing manufacturing efficiencies not economic stagnation

I.

Growth of the Industrial Base Early manufacturing growth of

agricultural economy - replaced articles made at home

Demand for capital goods (goods themselves that add to the nations productive capacity) like railroad equipment, machinery etc.

I.A.

Growth of the Industrial Base

“Steel Age” – Bessemer process adapted by Andrew Carnegie led to revolution in steel making

Ore comes from Great Lakes, coal from Appalachians – to Pittsburg, PA

I.A.

Iron & Steel ProductionI,A.

Growth of the Industrial Base

steam turbine

I,A.

The Railroad Boom

Free enterprise funds railroad with support by government

I,B.

The Railroad BoomRailroad business

Development came at great cost – 1889 alone, 22,000 died working for RR

I,B.

Railroad BoomOrganization I,B.

Mass Markets and Large Scale Enterprise

No “frontier” (borders) to slow shipment/transfer of goods –

I,C.

Mass Markets and Large Scale Enterprise

Gustavus Swift and Vertical Integration

Meat Packing

I,C.

Mass Markets and Large Scale Enterprise

Vertical Integration –

I,C.

Mass Markets and Large Scale Enterprise

How do you convince New Yorker to buy meat packed in Chicago?

I,C.

Mass Markets and Large Scale Enterprise

Retail Business changes –

I,C.

The New SouthDevelopmentally behind NorthFew cities, poor transportation, Cotton mills spring up – cheap labor

(mostly families, very few blacks)Tobacco – industrialized – JamesDukeTimber, coal, iron

I,D.

Economic RetardationCheap Labor kept South from

advancing – Why?1. Labor cheaper than machines2. Attract Labor intensive industries3. Inhibited investment in education4. Fewer workers have money,

spend less

I,D.

Few Immigrants went South – South remained a tributary economy of North – likewise immigrant labor will close door of opportunity to blacks

I,A.

The World of Work

Few Immigrants went South – South remained a tributary economy

II.

Labor RecruitsSociety of Motion

–Migration and ImmigrationNative born Americans find

White Collar jobs while Immigrants provide cheap labor

II.A.

Labor Recruits – Immigrant LaborGreat Migration starts 1840Commercialization of European

agriculture Irish Potato FamineEthnicity often determines

occupation Industrialization increases need for

unskilled labor – sources shift

II.

Labor Recruits – Immigrant LaborNew from South and East Europe Italian, Slavic, Polish etc.Ethnic “clustering”Steamships make voyage cheaperMany never planned to stay – often

did not

II.

Labor Recruits - WomenMostly single and youngDomestic work, textiles or white

collarSex typingPaid less than menChildren contributed to incomeAfter 1890 - % of married women

in labor forces creeps upward

II.A.

Labor Recruits – Autonomous Labor

Paid for production – not hourlyUsually skilled –better sense of

pride and history “brotherhood”

II.B

Labor Recruits – Systems of Control

Many jobs lost dignity of skilled labor

As tools become dedicated machines (do only one job), they need less skill to operate

–Cheaper and quicker

II.C

Labor Recruits – Systems of ControlFrederick Winslow Taylor –

Scientific ManagementTake thought process out of

manual laborSubject each task to a time and

motion study – limited success

–A new era had begun

II.C

How did workers respond to the changing working conditions of Industrialization?

The Labor Movement

Reformers and UnionistsKnights of Labor – fraternal

organization created to “emancipate” labor and create a cooperative common wealth. Open to almost all (even women and blacks)…Idealistic and political

–Terrence Powderly

III.A

The Labor Movement

Reformers and UnionistsTrade Unionism – Defended craft,

apprenticed workers – closed shopsFirst Local, then nationalMany belonged to both trade union

and Knights – no conflict yet!

III.A

The Labor Movement

Pure and Simple UnionismKnights become more political

(boycotts etc.)Samuel Gompers (Cigar maker)Wanted to focus on identifiable

and achievable goals Organize by craft –

battleground is the workplace, not national politics

III.B

The Labor Movement

Gompers – right does not equal victory, only power does

8 Hour workday – by May 1, 1886

Strike in Chicago (Haymarket Square) leads to riot, violence, death

Blamed on Anarchism

III.B

The Labor Movement

Economic circumstances made society ripe for radicalism–Anarchists

–Socialists

III.B

The Labor Movement

Seizing on hysteria of Haymarket Riot – employers crack down on Unions

Yellow-Dog ContractsBlacklists

III.B

The Labor Movement

American Federation of Labor – (AF of L) – Gompers President

Simply wanted bigger share of economic pie through collective bargaining

III.B

What do Mr. Robson, Justin Beiber, Tom Brady and Matthew

Morrison have in common?

The Labor Movement

Industrial WarThe Homestead Strike – (Carnegie

Steel)Henry Clay Frick – cuts wages,

disbands Union. Scabs brought in. Pinkerton Guards (Bully Boys) brought in, violence ensues.

***State Militia comes to aid of management***

III.D

The Labor MovementIndustrial War

The Great Pullman Boycott- Panic of 1893 (1st great

financial crisis on new industrial age) Pullman cuts pay, maintains rent

Eugene V. Debs – American Railway Union – coordinated secondary boycott –Brings trains to a halt

III.D

1. What enabled American cities to grow so dramatically during the 1800’s?

2. How did Industrialization affect Urbanization?

3. How did class structure, ethnicity and gender affect urban political affairs?

4. Describe the emergence of an urban culture with distinctive living and working patters, civic and religious institutions, family life and leisure pursuits.

Pullman CarsPullman Cars

A Pullman A Pullman porterporter

The Labor Movement

Industrial WarFederal Government Intervenes –

Leaders, including Debs jailed, strike dies.

Once again, Government intervention!

Laissez-Faire?

III.D

President Grover Cleveland

President Grover ClevelandIf it takes the If it takes the

entire army and entire army and navy to navy to

deliver a postal deliver a postal card in Chicago, card in Chicago,

that card that card will be delivered!will be delivered!

The Labor Movement

Radicalism In Prison, Debs becomes

more socialistSpreads movement to native

born Americans

III.D

The Labor Movement

Western RadicalismWestern Federation of Miners –

Consolidation and deflation bring about change – management wants to destroy Union

III.D

The Labor Movement

Western RadicalismViolence –

–Coeur d’Alene 1892 and 1899

–Cripple Creek 1894

–Leadville 1896Colorado elections 1905

III.D

The Labor Movement

Western Radicalism International Workers of the

World (Wobblies)

–Goal was to bring about a worldwide socialist revolution

III.D

“Big Bill” Haywood of

theIWW

“Big Bill” Haywood of

theIWWViolence was justified to overthrow capitalism.

2 views of Capitalism

Haratio Alger – Myth or Fact?

Workers Benefits Today

Workers Benefits Today

Right-to-Work States Today

Right-to-Work States Today